Forest City developer Country Garden says annual core profit doubles to record

Prospective buyers look at a model of the development at Country Gardens' Forest City showroom in Johor Bahru, Malaysia, on Feb 21, 2017.
Prospective buyers look at a model of the development at Country Gardens' Forest City showroom in Johor Bahru, Malaysia, on Feb 21, 2017.PHOTO: REUTERS

HONG KONG (REUTERS) - Country Garden Holdings Co Ltd, one of China's most aggressive property developers, said on Tuesday (March 20) that annual core profit doubled to a record on robust sales and higher margins.

Despite Beijing's efforts to cool a heated market, many of China's major property developers are expected to book their annual best-ever profits for 2017, benefiting as they speed up the pace of developments and from their bigger size as M&A activity makes the market less fragmented.

Country Garden's core profit, which excludes non-recurring income and revaluation gains, grew to 24.7 billion yuan (S$5.14 billion).

Net profit rose 126 per cent to 26.1 billion yuan, while revenue was up 48 per cent at 226.9 billion yuan.

Based in the southern Guangdong province, Country Garden ranks as China's top property developer by sales, although those sales figures include total revenue garnered at joint ventures.

Country Garden is also the developer of the US$100 billion Forest City project at Iskandar, Johor in Malaysia.

The developer said in statement it expected the government would promote the development of long-term property leasing.

Country Garden, which set up a long-term property leasing department late last year, said it had 3,000 such apartments were under construction in top-tier cities in 2017. It aims to build 1 million apartments to be leased in three years.

Although, Beijing introduced more tailored housing measures in cities last year in a bid to control home prices, property development has not let up.

Real estate investment in China over the first two months of 2018 grew at it strongest pace since 2015, with smaller developers rushing to roll out new projects amid a government crackdown on risky financing.

Shares in Country Garden were trading down 0.7 per cent after the results, versus a 0.5 per cent fall for the broader Hong Kong stock market.